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CSX CORP (CSX)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 adjusted EPS of $0.44 beat consensus $0.424, while GAAP EPS of $0.37 reflected a $0.07/share non‑cash goodwill impairment at Quality Carriers; revenue of $3.587B modestly beat consensus $3.570B . Values retrieved from S&P Global for consensus.*
  • Operating momentum continued: velocity +2% YoY, dwell −8% YoY, Intermodal TPC 93% and Carload TPC 83%; management expects headwinds to ease into Q4, setting up improved results .
  • FY25 guidance maintained for volume growth and $2.5B CapEx (ex‑Blue Ridge); Blue Ridge rebuild spend expectation raised to >$500M before insurance recoveries (from >$400M mid‑year), a notable cash flow swing factor .
  • Segment mix: Merchandise −1% revenue on −1% volume (pricing offset fuel/mix), Intermodal +4% revenue on +5% volume; Export coal weakness persisted (revenue −11%, volume −3%) while utility coal remained strong .
  • Dividend declared at $0.13 per share, payable Dec 15, 2025; leadership changes post‑quarter elevated Kevin Boone to CFO and Maryclare Kenney to CCO, aligning commercial and finance under new CEO Steve Angel’s performance agenda .

What Went Well and What Went Wrong

What Went Well

  • “This quarter’s operational performance reflects the dedication of our workforce … we see clear opportunities to leverage that operational strength moving forward,” said CEO Steve Angel, highlighting best‑in‑class network execution .
  • Intermodal strength despite soft trucking: Q3 revenue +4% on +5% volume driven by international growth and new domestic offerings; domestic expected to remain strong near‑term .
  • Safety and operations improved: FRA injury rate 1.16 (−7% YoY), train accident rate 2.55 (−21% YoY), velocity 18.9 mph (+2%), dwell 9.5 hours (−8%) .

What Went Wrong

  • Coal headwinds: export coal revenue −11% and RPU −9% YoY as benchmark pricing pressure and outages at customer facilities weighed; export tonnage −11% YoY .
  • Quality Carriers impairment: $164M non‑cash goodwill impairment reduced GAAP EPS by $0.07; restructuring/severance/advisory costs of ~$35M further weighed on adjusted EPS by ~$0.01 .
  • Mixed merchandise markets: chemicals and forest products volumes −7% YoY; ag & food −7% amid local supply and ethanol competitiveness; steel/industrial coal shipments −15% YoY on softer fundamentals .

Financial Results

Performance vs prior periods and estimates

MetricQ3 2024Q2 2025Q3 2025 (Actual)Notes
Revenue ($USD Billions)$3.619 $3.57 $3.587 Q3 2025 beat consensus $3.570B (≈+$0.017B)*
Operating Income ($USD Billions, GAAP)$1.354 $1.28 $1.087 Adjusted OI $1.251B (ex‑impairment)
Operating Margin (GAAP)37.4% 35.9% 30.3% Adjusted margin 34.9%
Net Earnings ($USD Billions)$0.894 $0.829 $0.694 Adjusted net $0.818B
Diluted EPS ($USD)$0.46 $0.44 $0.37 Adjusted EPS $0.44

Consensus vs Actual (Q3 2025)

MetricConsensusActualSurprise
EPS ($USD)$0.4239*$0.44 (Adjusted) Beat (+$0.016)
EPS ($USD)$0.4239*$0.37 (GAAP) Miss (−$0.054)
Revenue ($USD Billions)$3.570*$3.587 Beat (+$0.017B)
EBITDA ($USD Billions)$1.660*$1.682*Beat (+$0.022B)

Values retrieved from S&P Global.*

Margins (S&P Global)

MetricQ1 2025Q2 2025Q3 2025
EBITDA ($USD Billions)*1.473*1.717*1.682*
EBITDA Margin %*43.0%*48.0%*46.9%*
EBIT Margin %*30.6%*36.1%*35.1%*

Values retrieved from S&P Global.*

Segment Breakdown (Q3 2025)

SegmentVolume (‘000 units)YoYRevenue ($USD Millions)YoYRPU ($USD)YoY
Chemicals164−7%697−4%4,250+3%
Ag & Food110−7%382−8%3,473−1%
Minerals104+8%226+12%2,173+3%
Automotive99+1%306+2%3,091+1%
Forest Products68−7%247−5%3,632+2%
Metals & Equipment67+5%224+8%3,343+3%
Fertilizers48+7%126+7%2,6250%
Total Merchandise660−1%2,208−1%3,3450%
Intermodal768+5%527+4%686−2%
Coal184−3%490−11%2,663−9%
Trucking——207−3%——
Other——155+38%——
Total1,612+1%3,587−1%2,225−2%

KPIs and Operating Statistics (Q3 2025 vs Q3 2024)

KPIQ3 2024Q3 2025YoY
Train Velocity (mph)18.618.9+2%
Dwell (hours)10.39.5+8% (improvement)
Intermodal Trip Plan Compliance92%93%+1%
Carload Trip Plan Compliance80%83%+4%
FRA Personal Injury Frequency1.251.16+7% (improvement)
FRA Train Accident Rate3.212.55+21% (improvement)
Coal Tonnage – Domestic (MM tons)10.211.0+8%
Coal Tonnage – Export (MM tons)11.19.9−11%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent UpdateChange
Volume GrowthFY 2025Expect overall volume growth Still expect volume growth Maintained
CapEx (ex‑Blue Ridge)FY 2025~$2.5B (flat YoY) $2.5B (ex‑Blue Ridge) Maintained
Blue Ridge Subdivision Rebuild SpendFY 2025>$400M before insurance recoveries >$500M before insurance recoveries Raised
Cash Flow – Bonus DepreciationH2 2025~$250M cash flow benefit in H2 No change reiterated context via lower effective tax rate drivers Maintained (context)
Howard Street Tunnel Double‑StackService startQ2 2026 target Double‑stack clearance begins Q2 2026 (Baltimore) Maintained
DividendQ4 2025—$0.13/share payable Dec 15, 2025 Announced

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
Network recovery & executionWeather, tunnel closures drove congestion; plan to stabilize operations Sequential margin expansion via service recovery; Q3 wage step noted Best velocity since 2021, dwell at multi‑year lows; cost discipline continuing Improving
Major projects (Howard Street/Blue Ridge)Constraints expected until completion; Blue Ridge spend >$400M Completion in Q4; double‑stack ready Q2 2026 Completed slightly ahead of schedule; >$500M Blue Ridge spend; double‑stack in Q2 2026 Completed; monetization ahead
Intermodal strategy & partnershipsTariff volatility; East Coast advantage; pipeline building Domestic muted pricing; new opportunities incl. Myrtlewood connection New CSX‑BNSF coast‑to‑coast services; domestic strength near term Expanding
Tariffs/macroElevated uncertainty, mixed demand; potential U.S. manufacturing tailwinds International IM strength ahead of tariffs; domestic soft trucking Chemicals/forest products impacted by tariffs; intermodal international strength; interest rates watch Mixed, easing
CoalExport pricing headwinds; domestic utilities supportive Export RPU −16% YoY; domestic supported by gas prices Export tonnage −11% YoY but headwind diminishing; utility coal +22% YoY Stabilizing domestics
Industrial development~600 projects in pipeline; 24 facilities live in Q1 49 YTD facilities live; 30 more in H2 Team “actively developing new solutions”; momentum in aggregates/cement Building
M&A/industry consolidationOpen to opportunities to drive value; focus on service Addressed consolidation; balanced stance CEO: pursue compelling strategic opportunities; stringent STB criteria Watchful, opportunistic

Management Commentary

  • CEO Steve Angel: “Looking ahead, CSX is well‑positioned to build on this momentum to deliver long‑term profitable growth and create value for our shareholders” .
  • COO Mike Cory: “This was our fastest quarter for train velocity since early 2021 … With these projects complete, we now have full network access, positioning us for greater capacity and resiliency” .
  • CCO Kevin Boone: “Intermodal performed well … international benefited from strong growth with key customers … domestic volumes grew modestly due to new service offerings” .
  • CFO Sean Pelkey: “Adjusted expenses increased by 3% … severance, advisory and network disruption costs were ~$60M; year‑over‑year headwinds ease into the fourth quarter” .

Q&A Highlights

  • Cost unwind and exit rate: ~$45M sequential benefit Q3→Q4 as severance/advisory and reroute costs taper; ~$100M of network disruption costs drop out “out of the gates” in 2026 .
  • Pricing and commercialization: With service improvement, management expects better pricing conversations; trucking rate normalization could aid net pricing .
  • Coal outlook: More positive on domestic utility demand (data centers and regulatory backdrop); export benchmark headwinds diminishing; mine reopenings supportive .
  • Project monetization timeline: Howard Street tunnel trains in Q4; double‑stack capability from Q2 2026 pending remaining bridge clearance .
  • Strategic posture: CEO emphasized running franchise to best‑in‑class margins while opportunistically pursuing value‑accretive partnerships/transactions as conditions warrant .

Estimates Context

  • Adjusted EPS beat; GAAP EPS miss due to $0.07/share impairment. Revenue beat consensus modestly; EBITDA slightly above consensus. Values retrieved from S&P Global.*
  • Likely estimate revisions: model lower “Other” revenue run‑rate ($120–$130M vs elevated Q3), reduced reroute/project drag in Q4 and into 2026, higher Blue Ridge rebuild cash spend (> $500M), and stronger domestic coal trends offsetting export softness .

Key Takeaways for Investors

  • The core railroad is running at multi‑year efficiency, providing a tangible setup for margin improvement into Q4 and 2026 as one‑offs fade; watch for sequential cost normalization and operating leverage .
  • Intermodal momentum and CSX‑BNSF services broaden CSX’s commercial reach; domestic intermodal appears resilient even amid soft trucking, presenting near‑term wallet share gains .
  • Segment mix pressure from export coal is easing; domestic utility coal strength plus aggregates/cement demand offer partial offsets through winter .
  • Adjusted EPS beat versus consensus should support near‑term sentiment; be mindful of GAAP/adjusted reconciliation and the impairment’s non‑recurring nature .
  • Cash flow tailwinds include bonus depreciation (~$250M H2 benefit) and reduced network disruption costs post‑projects; CapEx discipline ($2.5B ex‑Blue Ridge) maintained .
  • Strategic posture under new CEO favors best‑in‑class margins and opportunistic partnerships over speculative consolidation; watch regulatory (STB) developments and industry M&A signals .
  • Dividend sustained ($0.13/share) with history of steady increases; leadership realignment (Boone to CFO, Kenney to CCO) may accelerate commercial‑finance coordination in pursuit of profitable growth .

Notes: All document facts are cited. Consensus/financial metrics marked with * are values retrieved from S&P Global.